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SYNCRONIZED LTD

Publication Date
11 December 2014
Case Reference
28354
Procedure
Track 2
Adjudicated Party
SYNCRONIZED LTD
Service Type
Non-professional advice
Tribunal's final assessment
Very Serious
Sanctions
Code 12 para 4.8.2b - Formal reprimand and/or warning
Code 12 para 4.8.2d - Fine
Code 12 para 4.8.2i - General refunds
Code 12 para 4.8.2k - Compliance audit
Breaches raised
Code 12 2.3.1 Fairness
Code 12 2.3.3 Fairness
Summary

Between 18 May 2013 and 12 August 2014, PhonepayPlus received 125 complaints from consumers in relation to adult and glamour video subscription services (the “Service(s)”) operated by the Level 2 provider, Syncronized Ltd (the “Level 2 provider”). The Services operated under the names “Fuck Hunter”, “Titty Tingle”, “Glam Pleasures” and “Sex Dose” on the premium rate shortcodes 89066, 85033, 69063 and 88150. Consumers were charged between £1.50 and £4.50 per week depending on the Service they engaged with. The Services commenced operation in May 2012, October 2012 or April 2013 and they continue to operate, save for the Fuck Hunter Service which ceased to operate in March 2014.

The Services were promoted online via banner advertisements. Consumers subscribed to the Services, using mobile originating (“MO”) opt-in or a wireless application protocol (“WAP”) link Consumers could also engage with the Services using a free Android application (the “Application”).

The majority of the complainants stated that they had received unsolicited, reverse-billed text messages but that they had not engaged with the Service.  In addition, one complainant reported receiving unsolicited charges but stated s/he had not received any text messages from the Services. Further concerns were identified regarding the Application, as the PhonepayPlus Research and Market Intelligence team (“RMIT”) tested an Application for the Service and found malware that suppressed the receipt of Service messages.

The Executive raised the following potential breaches of the PhonepayPlus Code of Practice (12th Edition) (the "Code"):

• Rule 2.3.1 - Fair and equitable treatment
• Rule 2.3.3 - Consent to charge

The Tribunal upheld both breaches of the Code. The Level 2 provider’s revenue in relation to the Services was within the range of Band 3 (£250,000-£499,999). The Tribunal considered the case to be very serious and imposed a formal reprimand, a warning that if the Level 2 provider fails to demonstrate that it has robust verifiable evidence of consumers’ consent to charge in the future, it should expect to receive a significant penalty, a fine of £120,000 (which includes a £20,000 uplift that was imposed as a result of the Level 2 provider’s relevant breach history), and a requirement that the Level 2 provider must refund all consumers who claim a refund, for the full amount spent by them on the Services, within 28 days of their claim, save where there is good cause to believe that such claims are not valid, and provide evidence to PhonepayPlus that such refunds have been made. In addition, a requirement was imposed that the Level 2 provider submit to a compliance audit of its procedures for ensuring consumers provide valid consent to be charged and that it has robustly verifiable evidence of that consent, the recommendations of the audit must be implemented within a period defined by PhonepayPlus, the audit must be conducted by a third party approved by PhonepayPlus and the costs of such audit must be paid by the Level 2 provider.